homefinance NewsWhen Keki Mistry rejected two glamorous offers to join startup like HDFC four decades ago
When Keki Mistry rejected two glamorous offers to join startup like HDFC four decades ago
In his interaction Moneycontrol, Keki Mistry talked about his early days at HDFC, the challenges he faced, his role in the post-merged entity and the key trends that will drive housing loan finance ahead.
It's been close to 42 years since Housing Development Finance Corporation's (HDFC) CEO Keki Mistry has been associated with the housing loan provider but it wasn't his first job.
Mistry worked in Indian Hotels' Taj for about one and a half years after finishing his CA, following which he was offered the Chief Accountant position at a Taj property in Goa but he wanted to stay put in Mumbai as his mother was old and he needed to take care of her. However, growth opportunities at Taj in Mumbai were limited then, he says.
Following this, in 1981, Mistry was made three offers — from a multinational company, from City Bank and another one from HDFC. Mistry evaluated his options and thought City Bank would be the most glamorous because that was the place to be in those days for anyone who wanted to be in the banking sector but he didn't want to be just one of the many people.
The freedom and scope to grow HDFC impressed young Mistry and he made his choice and hasn't looked back since. "In those days, mortgage penetration in India was almost zero. Hardly anyone ever took a housing loan... In the 80s, you'd be shy to be seen in a place that provided loans, that was the culture," Mistry told Moneycontrol’s Banking and Finance Editor Dinesh Unnikrishnan in an exclusive conversation.
In his interaction with Moneycontrol, Mistry talked about his early days at HDFC, the challenges he faced, his role in the post-merged entity and the key trends that will drive housing loan finance ahead.
Reflecting on his early days at HDFC and the housing loan business then, he said, it was very different from what it is now since HDFC was the only one housing loan provider in the country.
"We actually created our own competition over the years. State Bank of India, Central Bank, Canara Bank, all approached us at some point in the mid 80s, late 80s, and early 90s to partner them in setting up a separate housing finance company," Mistry said. He said they also approached to check if HDFC could invest in some equity or train their people or deploy someone to be in-charge of the firm and it did that.
The second thing he mentioned was, in those days there were no floating rate loans, all were fixed rate loans, products were very simple, there was no foreign shareholding in HDFC or India. So, some degree of competition started coming up only in the late nineties, he added.
"With the passage of time, the objective is to sell housing loans from more locations and branches of the bank," Mistry said, talking about the current times.
The market, Mistry said, which currently has a penetration level of around 11 percent of the gross domestic product (GDP), can reach up to 20 percent in the coming years.
Post the HDFC-HDFC Bank merger, there is a huge opportunity to the housing finance sector, adding that the merged entity will provide a bigger platform for lending to the housing sector.
“Growth opportunity on loans will be a bigger opportunity in HDFC Bank than HDFC. Gradually, the objective is to expand housing loans from more and more branches of the bank,” Mistry said.
Mistry also clarified that he will not take any executive role in the bank but could look at joining the board.
Watch the full conversation here
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